Nigeria and other members of the Organisation of the Petroleum Exporting Countries (OPEC) are in talks to extend oil production cut through the year of 2020, reports have said.
Quoting a source, a Russain news agency, TASS, said discussions were still in the early stages. It was further disclosed that there was an understanding among the cartel members to extend the latest cuts which expires in March till the end of the year.
It was also stated that it was unlikely that the cartel will decide to relax the cut in March because the market is still very bearish in its demand growth outlook and there is also the threat of oversupply.ALSO READ Oil Price Overheating: What Next for OPEC?
At the OPEC+ meeting in December, the group and its Russia-led partners decided to deepen the oil production cuts by 500,000 barrels per day in the first quarter of 2020 to brings total production reductions at 1.7 million barrels per day.
The latest agreement will expire at the end of March and OPEC and its allies are set to meet in the Austrian capital, Vienna on March 5 and 6 to decide how to proceed with the deal.
According to Saudi Arabia’a Energy Minister, Prince Abdulaziz bin Salman, said on Thursday that all options were on the table for the next summit of the OPEC+ coalition, including further cuts in oil production.ALSO READ Nigeria’s Crude Oil Production Hits 1.385 bpd
OPEC will have to address the oversupply in the market in the first half this year, and the cartel is likely to extend the production cuts through the end of 2020.
At the WEF, the International Energy Agency (IEA) said it expects a surplus of 1 million barrels per day in the first half of the year.
This is one of the many challenges facing oil as demand is depleting in the largest importer of oil, China with the spread of the coronavirus with the Chinese government imposing a series of warnings and restrictions on key travel routes as authorities step up efforts to contain the spread of the outbreak, which began in China’s Wuhan city.
